attention. The FDIC can now either repudiate these contracts and treat the in-the-money counterparties as at-risk general … the FDIC and protects the counterparties, who would otherwise be at-risk and monitor their banks. This paper proposes a …-the-money counterparties at-risk, thus maintaining discipline on banks by large and sophisticated creditors"--Federal Reserve Bank of Chicago …

regulators to protect all depositors in bank failures. This is likely to increase both moral hazard risk-taking by banks and poor …